Solar Energy Now Within the Grasp of the Average Homeowner

For those who were interested in installing a home solar energy system but were turned off by the $20,000 price tag, brighter days may be ahead. This week, several Orange County cities began participation in a renewable energy program that makes it easier for homeowners to pay for solar systems over several years.

Property assessed clean energy loans (PACE) allow homeowners to make renewable energy upgrades to their properties, then repay the debt through their property taxes over a period of as long as 20 years. The program, known as HERO (home energy renovation opportunity), is administered by privately owned Renovate America Inc. and has been popular with several cities in the western portion of Riverside County. Starting Monday, the program began making inroads in the land of citrus in cities including Anaheim and Brea. According to the director of project development at Sullivan Solar Power, David Savarese, the program will give homeowners the opportunity to slash energy bills and earn tax benefits at the same time.

"[HERO] will give you a tax assessment loan for the solar system, you can also receive the 30-percent tax credit and you are able to write off the majority of the loan on your property taxes," Savarese said.

Another benefit of the program, is that because of the loan's fixed rate customers aren't subject to the fits and starts of the energy market.

"You will not have an electric bill. You're going to have an annual payment added to your property tax in lieu of your bill," Savarese said.

Though the program presents a hermetically neat package, (especially for mindful homeowners who read the fine print), in 2010 the PACE program faced pushback from the Federal Housing Finance Agency (FHFA), which refused to underwrite loans on homes with PACE loans. According to Ethan Elkind, an attorney who studies environmental policy and holds a joint appointment at Berkeley and UCLA law schools, the government was concerned with debt repayment.

"When the housing crunch happened, they got skittish with the proliferation of these [PACE] programs," Elkind told the Weekly.

Elkind explained that entities like banks and federal lenders would have to get in line for repayment behind municipalities in the event that there was a default on a home loan that also had a PACE loan. But according to a 2012 Forbes blog, a federal judge ruled the FHFA violated federal law when it decided not underwrite such loans. According to Eklind, the FHFA's concerns were overblown.

"PACE programs, if they're done right they're set up with all sorts of safeguards. The homeowner has all sorts of hoops to jump through to make sure they're eligible," Elkind said.